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Does the Foundation make grants to organizations with a negative fund balance? With an operating deficit? What is the difference?
Why do you require so much financial information?
We do not have all the financial information you require. What do you recommend that I do?
Not all of our board members contribute financially to our organization; does this disqualify us?
What if my organization has not operated for a full year? Can I still apply without having year-end financials?
Our audit will be ready a few weeks after the deadline. Would it be okay if I just include a note about that and submit my proposal anyway?
Does the Foundation make grants to organizations with a negative fund balance? With an operating deficit? What is the difference?
An agency’s fund balance (or net assets) is shown on its Balance Sheet (Statement of Financial Position). A negative fund balance occurs when the organization’s total liabilities are larger than its total assets.
An operating deficit occurs when an organization’s expenses are larger than its revenues for a specific period of time, such as a fiscal year. This is shown on the Income Statement (Statement of Financial Activities).
While we will consider grants to organizations that have a fiscal year end operating deficit, we see this as a symptom of possible problems within the organization, and will be asking some tough questions if the proposal proceeds into the review process.
However, The Denver Foundation will not consider a grant to an organization with a negative fund balance at the end of its most recent fiscal year. There are no exceptions to this. Sadly, many organizations go through the trouble and expense of submitting a proposal to the Foundation without checking this important fact. If you have any doubt about whether or not your organization has a fund balance deficit at its fiscal year end, have someone with knowledge and understanding of nonprofit financial reporting review your financial information before you submit a proposal to The Denver Foundation.
Why do you require so much financial information?
We use the Common Grant Application and have only one exception to its financial requirements. Please see our guidelines.
We do not have all the financial information you require. What do you recommend that I do?
We believe all nonprofit organizations should practice sound financial management. Having the financial information documents that we require should be “standard operating procedure” for all nonprofits. If you cannot provide this financial information in the documents that we require, you cannot apply for a grant.
The only exception to this would be if your organization has been in operation for less than 12 months and you consequently do not have “fiscal year end” documents. In this case you should add a note with your proposal – on a separate page -- explaining why these documents are not included. Failure to do so would result in your application being considered “incomplete.” You would still need to provide all year-to-date information required.
Not all of our board members contribute financially to our organization; does this disqualify us?
In accordance with best practices in the nonprofit sector, The Denver Foundation believes that members of the board of directors should contribute both their time and their money to the organization they serve. By this, we mean direct personal financial contributions, and not a contribution that the board member helped to get for your organization. While we also believe that each board member should give a personal financial contribution that is “significant” for their own individual circumstances, the amount of a gift is not as important to us as the commitment of 100% of the board. One way of viewing this might be, “Why should The Denver Foundation contribute financially to your organization if your own board members do not give?” Even organizations that have very low-income people on the board can successfully promote this – a $10.00 gift from that person might be just as significant as a $1,000 gift is from someone else. The Foundation does not, however, disqualify an organization from receiving a grant on this factor alone.
What if my organization has not operated for a full year? Can I still apply without having year-end financials?
If your organization has been in operation for less than 12 months and consequently does not have fiscal year end documents, you can still apply. In this case you should add a note with your proposal -- on a separate page -- explaining why these documents are not included. Failure to do so would result in your application being considered “incomplete.” You still need to provide all year-to-date information required.
Our audit will be ready a few weeks after the deadline. Would it be okay if I just include a note about that and submit my proposal anyway?
Like the CGA, we require financials from your most recently completed fiscal year. However, please note the following difference, which is based on your total revenues for the most recently completed fiscal year:
Revenues greater than $500,000 -- you must provide a complete Audit (with notes, management letter, etc.) performed by a Certified Public Accountant who is independent of your organization. If an audit is unavailable for the most recently completed fiscal year at the time of our deadline, you must turn in two things:
1) Internal year-end financial statements for the most recently completed fiscal year
2) Audit from the previous fiscal year -- and please add a note telling us when you expect your new audit to be ready.
Revenues less than $500,000 -- when an audit is not available, you must provide your Statement of Financial Position (Balance Sheet) and Statement of Activities (Income and Expense Statement). Please check with the Grants Manager if you have any questions about this requirement.
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